Sale of five floor apartments
September 13, 2011 | 30,00 EUR | answered by Dr. Yanqiong Bolik
Dear Sir or Madam,
The following is my concern.
I want to sell five condominiums, which have been continuously rented since their acquisition, to a single buyer (an acquaintance) in October 2011.
Three properties have been in my possession for more than 10 years since their acquisition.
Two properties have been in my possession for over 7 years since their acquisition.
Does this now raise suspicion of commercial activity?
According to my understanding, I should be able to sell the first three properties tax-free (adhering to the 10-year speculation period).
Or does the simultaneous sale of the other two apartments now destroy my patience and require the entire profit to be taxed, potentially also incurring business tax? (3-property rule)
I bought the apartments for my retirement and now want to reallocate my assets.
Thank you
Dear inquirer,
Thank you for your inquiry, which I will gladly answer taking into account your effort and the rules of this platform.
Please note that my explanation is based on the facts presented, and that adding, omitting, or changing information can alter the tax outcome.
In assessing the tax implications of the sale of properties by individuals, whether a commercial real estate trade is present, it is essential to consider the duration of use before sale and the number of properties sold. To differentiate between private asset management and commercial real estate trade, the Federal Ministry of Finance (BMF) has developed a simplified test scheme.
Firstly, there is no close temporal connection between acquisition or construction and sale, as all apartments have been in your possession for over 5 years. Additionally, the 3 apartments rented out for over 10 years do not count towards the 3-property limit. Thus, the 3-property limit is not exceeded. Therefore, the planned sale of the apartments is not considered a commercial real estate trade.
I hope this information is helpful to you.
If you have any further questions, please feel free to use the follow-up function.
Best regards,
Dr. Yanqiong Bolik
Tax advisor
Bildstöckle 6, 70567 Stuttgart
